How to plan for FIRE when there's still so much uncertainty?

[PoutineLover]

This is a question that's been on my mind lately. I'm young, I'm motivated to save, and I want to FIRE, but I feel like since my life is barely established, it's too hard to make solid plans and especially a solid FIRE date.
Current situation:
Renting a cheap, family-owned apartment with my partner, working a contract job, no kids, no property, building up stash, decent economy.
According to current projections: FIRE in 15 years at age 42.
Potential situations:
Marriage, kids, possibility of owning a house (or duplex/triplex to rent other units), different job, maybe different city, potential recession at some point, possible inheritance, etc.
It becomes impossible to calculate a FIRE date, because there are way too many unknowns. Estimates for how much kids cost vary wildly, housing costs are a big unknown, my/our income(s) will almost certainly change, etc.
It's fun to play around with spreadsheets and calculate savings rates and all that, but I can't get too set on specifics because it feels like everything will probably change before I get there.
Is anyone else in this kind of limbo? People who are older and past their child-rearing years and in a solid permanent job seem to be able to predict with more certainty what their expenses will be in retirement, although I understand that it's never 100% accurate anyway, and a major event like a recession/divorce/health problem can throw everything out of whack for anyone. But for me, it seems silly to say I'll retire at 42 because my life at 42 is likely to be completely different from my life at 27. Anyway, that was a bit of a ramble, just kinda wondering if other people have the same dilemma and how they deal with it.

[onlykelsey]

I started here at 27 or 28 and am now 32.  obsessively make detailed spreadsheets with dozens of different fact patterns, which I think is actually NOT the best response.

My response from five years down the road is: live well below your means, save and invest aggressively, and figure out what you want out of life in non-economic areas (partner? kids? living in a city? on a boat? abroad?) and trust that investing aggressively will help you with whatever your goal ends up being.  Don't let FIRE drive your other big life decisions too much... I can't imagine FIRE-ing is very enjoyable if you're miserable, single, wishing you had had kids ten years ago, etc.

[Zikoris]

We started working towards FIRE at about age 23 and 25, and are 30 and 32 now. Here are some of the ways we handled unpredictability.

We have always tried to live as close to our ideal lifestyle as possible. This means it's easy to tell what that lifestyle costs - because we're already doing it!

We're happily, permanently childfree, and probably will not get married barring some strong outside motivator - and even if we did, it would be signing paperwork at the courthouse, not any sort of wedding.

We know that our preference for investing is to have zero-maintenance index fund portfolios, and not mess around with anything more complicated or time consuming.

As far as predicting future income, we don't really do that much - we just commit to keeping our expenses low and savings rate above 50%.

As a general rule, we plan our lifestyles in such a way that we don't have large expenses. We don't have a car, own property, have kids, or enable anyone else's bad lifestyle choices.

[zeli2033]

I think Ben Kurtz said it really well to me when I posted a case study. My goal had been to nail down a specific FIRE date 10+ years in the future, despite the unpredictability of life:

My closing point is a big-picture one: Given your stage and position in life, I would counsel against fixating on a plan for "complete FIRE" -- figuring out some savings number that will "guarantee" you the ability to live out the rest of your lives without working another day, and establishing a plan for how exactly you will get there. There are too many unknowns -- children, career path, choice of geographies, the gyrations of the stock market in the next 5 to 10 years, etc. -- to make this viable. There are huge chances that your assumptions and plans will turn out to be wildly optimistic or entirely over-conservative. The key thing is to build up your position of strength, which your post suggests you have started on well: Get a good job with growth prospects, establish good spending and saving habits, marry a good spouse, and try to avoid making too many bad mistakes. Build up good 5 and 10 year plans, and every few years evaluate your progress and status. Before you know it, you will be wealthy and spoiled for good options, including early retirement and semi-retirement, while your spendthrift friends and colleagues will still be heavily in debt and wondering how it is possible to live on less than $150,000 per year while driving everywhere in their late-model Jaguars. At this stage in life, you're goal is to deal your 38-year-old self a strong hand of cards, not write the script on the next 50 years of life.

In other words, establish a financially sound base (no debt, save more than you earn, invest the rest) as well as a strong "life" base, whatever that means to you. Make short term goals and evaluate your progress regularly.

Eventually, you'll get to a point where FIRE is in striking distance and you'll have enough information to be able to build more concrete plans for it. That's what I'm hoping for at least :)

[Freedomin5]

I think Ben Kurtz said it really well to me when I posted a case study. My goal had been to nail down a specific FIRE date 10+ years in the future, despite the unpredictability of life:

My closing point is a big-picture one: Given your stage and position in life, I would counsel against fixating on a plan for "complete FIRE" -- figuring out some savings number that will "guarantee" you the ability to live out the rest of your lives without working another day, and establishing a plan for how exactly you will get there. There are too many unknowns -- children, career path, choice of geographies, the gyrations of the stock market in the next 5 to 10 years, etc. -- to make this viable. There are huge chances that your assumptions and plans will turn out to be wildly optimistic or entirely over-conservative. The key thing is to build up your position of strength, which your post suggests you have started on well: Get a good job with growth prospects, establish good spending and saving habits, marry a good spouse, and try to avoid making too many bad mistakes. Build up good 5 and 10 year plans, and every few years evaluate your progress and status. Before you know it, you will be wealthy and spoiled for good options, including early retirement and semi-retirement, while your spendthrift friends and colleagues will still be heavily in debt and wondering how it is possible to live on less than $150,000 per year while driving everywhere in their late-model Jaguars. At this stage in life, you're goal is to deal your 38-year-old self a strong hand of cards, not write the script on the next 50 years of life.

In other words, establish a financially sound base (no debt, save more than you earn, invest the rest) as well as a strong "life" base, whatever that means to you. Make short term goals and evaluate your progress regularly.

Eventually, you'll get to a point where FIRE is in striking distance and you'll have enough information to be able to build more concrete plans for it. That's what I'm hoping for at least :)

+1 What a great way to put it!

[FindingFI]

My solution to the problem was to ignore a FIRE date for now.  Like you, we are still pretty far away with some big life changes still to come and whatever date I came up with is a guess at best.  We just got married, we plan to have kids and I don't know what those will cost over time.  We might drop to one income, the mortgage only has a few years left.  All of those will effect expenses in retirement and a FIRE date substantially. 

But the thing I realized is that no matter what the date is, our actions right now wouldn't change.

If the calculations said we could retire in 5 years, we would live a life that we are happy with, maximize income and savings, reduces expenses and invest as much as possible.  If the calculations said we could retire in 20 years, we would live a life that we are happy with, maximize income and savings, reduce expenses and invest as much as possible.  So that's what we are going to do, and when the stash is bigger and we feel like we have a better grasp on what the future will look like, then we can start zero-ing in a FIRE date. 

[Maenad]

+2 to what Ben Kurtz said.

I've been planning ER and reading various online fora for 20 years as our plans have shifted and changed. It's kind of like tacking into the wind while sailing - you adjust as you go. We're not where I thought we'd be 20 years ago, but every decision along the way has been made with open eyes and the knowledge of the likely impacts.

We're now ~1.5 years out (barring market meltdown - knock on wood), and while we have a number of possible paths and ideas for post-FIRE, we're sure things will change and we'll adjust as we have been.

tl:dr - don't worry, things will change, and it will be OK.

[Rosy]

Actually, I wouldn't be too concerned this far out, 50%+ savings and living below your means will get you there. Some do real estate and some do index funds and some people do both along the way.
If you acquire more skills you'll have more choices and opportunities in the future - you never know where even one course or seminar may take you.
If you are really good at something, keep honing that skill but don't neglect the spin-off possibilities either, they may one day be what will save your bacon.

Enjoy your life now, it is all that you will ever be guaranteed:) - Life itself is uncertainty - having an FI plan will not change that, but it can be a buffer.

+3 to what Kurtz said.

[catccc]

It is hard to plan when so much can happen!  I've always had my eye on ER, I remember graduating college in December 2002, and early the following year, as soon as I had enough cash from my "real" job, maxing out my IRA for both 2002 and 2003.  I made spreadsheets and ran calculations, but not nearly as sophisticated as models that are readily available now.  If FIRE is far away, don't worry about the date, it's gonna change, probably.  Just keep on going, the name of the game is to save as much as you can while living a lifestyle you find suitable. It's the journey as much as it is the destination.

I can say that in 2012, I posted to the early-retirement.org forums. 
http://www.early-retirement.org/forums/f26/one-income-family-of-4-working-towards-fire-feedback-please-63166.html
6 years ago, I was 33 our NW was $350K, and I thought we were in good shape for me to quit at 55, but I really wanted to be out at 48.

Today I'm 39, our NW is $1.022M, and it's totally possible that I can stop working sometime in 2020.  If it's before my August birthday, I'll be 40.

Even with FI relatively close, there is still uncertainty.  What if the market tanks next year?  What will our health insurance options be?  I guess even this close, it's a wait and see kinda thing.

Good luck!

[PoutineLover]

Thanks for all the responses so far. I'm living a life that I'm pretty happy with so far, and my spending is under control with no debt and low expenses. My savings rate is around 50%, and for my life stage things are going well. Guess all I can do now is just keep on saving, make progress on other life goals like starting a family, and evaluate opportunities like purchasing a home as they come up. I guess there's no big rush. I've been aware of the idea of early retirement for a couple years now, and I've made lots of progress, but it's slow and steady and there's lots of living to do while I work towards my goals.